Corporate News

Basic Energy bags new dev’t contract

LISTED Basic Energy Corp. has received a new service contract from the Energy department covering a geothermal concession area in the province of Sorsogon, the firm said in a disclosure yesterday.

“Basic... recently received the letter, dated Dec. 12... of the Department of Energy informing the company that the geothermal renewable energy service contract for West Bulusan, Sorsogon was approved and signed by Secretary Carlos Jericho Petilla,” the disclosure read.

“All are older than the presently active Bulusan Volcano located in the northeast,” the company noted.

“There are reported hot springs and altered grounds in the area which could enhance geothermal prospectivity.”

Last April, the company also received three geothermal contracts covering several areas in Luzon.

Basic had identified these projects as the Iriga Geothermal Power Project, Mariveles Geothermal Power Project and the East Mankayan Geothermal Power Project.

The company said that the Iriga project is located in Camarines Sur, while the Mariveles project is in the province of Bataan. The East Mankayan project, on the other hand, spans three provinces in the Cordillera Administrative Region, namely: Benguet, Ifugao and Mountain Province.

Energy Undersecretary Ramon Allan V. Oca had said earlier that geothermal service contracts start with a five-year pre-development stage.

Afterwards, the developer has to declare commerciality before proceeding to development stage.

The second phase can run from 25 to as long as 50 years, depending on results of exploration tests.

Last week, Basic signed a memorandum of agreement with Trans-Asia Oil and Energy Development Corp. which would allow the latter to acquire a 10% stake in the former’s Mabini geothermal service contract in Batangas.

The agreement also provides that such interest may be increased to up to 40%.

Both parties will execute a farm-in agreement once Trans-Asia will have decided on a definitive interest, “depending on the results of the onshore gravity program...” Basic had said.

The Mabini service contract requires drilling of one exploratory well by July 2015, according to the company.

The same agreement gives Trans-Asia “the option to acquire up to 60% interest” in Basic’s other geothermal service contracts.

Basic, which is also involved in oil exploration in Mindoro and Sulu Sea, saw its bottom line swing to a P9.31-million net loss as of September from a P187.66-million net income in the same nine months last year. Revenues fell 91.3% to P20.23 million from P232.48 million, while costs and expenses dropped by a smaller 8.4% to P29.5 million from P32.25 million. Its shares closed at 23.5 centavos apiece yesterday, down 2.08% from 24 centavos each on Wednesday. -- Claire-Ann Marie C. Feliciano